Grains: Russia at loggerheads with facts
September 30, 2022 at 12:18 PM ,
Der AUDITOR
Partial truths
Dissatisfied by how the deal is playing out for Russian grain traders the country is making a strong stand against an extension, that is if Russian demands are not met. As news agencies report President Vladimir Putin wants EU countries to be excluded as destinations for shipments. His claim is that the grain corridor is ‘deceiving’ poorer countries as most shipments are destined for Europe.
UN figures, however, dismiss such claims. Although as much as 50% of the shipments leaving Ukrainian ports between 01 August and 23 September were indeed destined to high-income countries such as Spain, Netherlands, Italy, South Korea, Romania, Germany, France, Greece, Ireland and Israel, it should be noted that these shipments also contributed to bringing down prices and securing global supplies. In addition, 25% of the cargo was in fact shipped to low and lower-middle countries such as Egypt, India and Iran, Bangladesh and Kenya, Sudan, Lebanon, Yemen, Somalia, Djibouti and Tunisia, whereas upper-middle income countries including Turkey, China and Bulgaria bought the remaining 25%. The Black Sea Grain Initiative Joint Coordination Centre further states that 238 vessels carrying more than 5 million mt of grains and other foodstuffs have left Ukrainian ports so far as of 29 September. Of these shipments the World Food Programme has chartered four vessels loaded with 110,800 mt of wheat.
Extension at risk
Although the grain corridor has met its targets of helping to bring down prices and get supplies moving, the extension is at risk. Signed by the UN, Russia and Turkey and Ukraine on 22 July the deal permits grains, other foodstuffs and fertilisers to be exported from the three Ukrainian ports of Chornomorsk, Odesa and Yuzhhny/Pivdennyi. Ukraine would like to add Mykolaiv as a fourth port. The deal, however, only runs for 120 days and is due to expire on 20 November. With Russia becoming more aggressive towards Ukraine and the West an extension desired by all parties but Russia may very well fail.
Corn and wheat traders in Europe certainly prefer to buy well before the deadline approaches as the level of uncertainty is too great. The grain corridor is important for Ukraine but the country is also relying on other alternatives such as the Danube river and railway systems to export corn and wheat. Corn exports certainly climbed to 1.54 million mt in September as opposed to 130,000 mt in September last year. Although shipments from Ukraine are up and running the uncertainties over the grain corridor are partly to blame for the present rise in the prices for corn and wheat in Germany and France. Delays in sowing and threshing in Ukraine have also contributed to the rise.
|
EU bread wheat (12/220/76) |
||
|
Destination |
EUR/mt |
Diff. EUR/mt |
|
Hamburg, Germany, delivered* |
360 |
8 |
|
Upper Rhine, France & Germany, FOB |
337 |
-3 |
|
EU grain maize, yellow, 98% purity |
||
|
Destination |
EUR/mt |
Diff. EUR/mt |
|
Bordeaux, France, FOB |
351 |
7 |
|
South Holland, CIF |
350 |
10 |
|
Brake, Northern Germany, FCA* |
343 |
9 |
|
Upper Rhine, France & Germany, FOB |
336 |
1 |
|
Trade sources, weekly comparison |
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View more
- price chart, corn, yellow, 99.5% purity, Matif
- price chart, milling wheat, Matif
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